Australia's renewable energy future

A low carbon economy based on renewable energy: The only way to go

Tuesday, 2 September 2008

Dr Barney Foran
Fenner Centre for Research and Environmental Studies
Australian National University

Barney Foran has degrees in agriculture and ecology which led to professional eras spanning rangeland ecology, agricultural systems, environmental science and long term analysis of Australia's physical economy. He led research teams in CSIRO's Resource Futures group which produced long term analyses of Australia's physical economy focusing on human population (Future Dilemmas), marine fisheries (Fish Futures), land and water (Decision Points) and a triple bottom line analysis of the Australian economy (Balancing Act). His current work focuses on integrated solutions to Australia's challenges of energy security and greenhouse mitigation. He is a research fellow at the ANU's Fenner School of Environment and Society, The Institute of Land Water and Society at Charles Sturt University, and the Physics Department at Sydney University.

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Thanks very much for having me here tonight. I guess I'm going to sound like I'm an advocate, a proponent – and I guess I am – but I am trying to put a strong case tonight for revolutionary change in how we run energy systems in Australia.

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Sue has mentioned that we are at the start of a series. In October it will be a real humdinger: Martin Green, a world figure in solar photovoltaic technologies who had as his PhD student at one stage, I believe, the richest man in China – so worth a listen. He might drop a few ideas with which I can bolster my own wallet.

The questions that are going to be asked about all the individual technologies are those up there: how does it work, what are the things standing in its way and so on? So, with the story I am going to give you tonight, I want you to keep a bit of it in your mind and then, as you come to the following series, to start to pose your own tough questions as to whether we can get there.

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Tonight, as I said, I am going to be talking mainly about renewables transition. I will be talking about work that I am doing in which I am analysing in equal depth what I call the 'best conventional approach'. I guess the strong push that we get from definite parts of government and industry that is future based on coal and fossil fuels is the only way. I should say that I am not here banging the drum on greenhouse alone; I started this work or was pushed into it in my former life to deal with issues like keeping Australia going as an entity – it's energy security. Greenhouse was one issue, but I guess we all start from a very broad sense and that will be part of my story tonight.

There is a lot of supporting evidence coming out that renewables is the way to go. In fact, as I was sitting and going through my notes, I was made aware of a very good Green Peace document that is part of a world push on renewables by Green Peace. There is a whole range of surrounding issues that could potentially decouple or undo the push towards this transition and then, as I said, there will be an ongoing series, when you can deepen into each technology.

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There is, of course, a long way to go. There are those, what I call 'cockroach poos' up there, scattered all over that graph. Those little dots represent the average greenhouse emissions per person for each shire and suburb in Australia. We could talk about that relationship all tonight; in fact, there are so many classic and wonderful examples. When Malcolm Turnbull was the Minister for Environment, I used to enjoy pointing out which dot he actually lived in. The key issue for me is that that whole cloud, if you like, of cockroach poos over the next 50 years has to shift down from its average of about 20 tonnes per capita to somewhere below five. It is an immense challenge and part of what we are faced with tonight.

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It is going to take not only a huge amount of bottom-up stuff by you and me in our individual lifestyles and in our own houses but also a lot of work by 'them', whoever they are. Tonight I will talk almost entirely about 'them' and the top-down approach to give us the structure so that we are aided and abetted in the massive change that we are going to undertake.

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The approaches that we use are slightly different from those that are used mostly in the policy churn across the Lake [Burley Griffin] and in many other areas. We develop and use or, let's say, take the structure of the economy as explained by the ABS [Australian Bureau of Statistics] and various departments of Treasury and so on, but we then interpret that as well as all the dollar and financial flows; we underpin that with fairly exact physical representations – mass balance, thermodynamics, litres, tonnes, joules and all that sort of thing – of how each process actually works. So, in the end, this provides a sort of tension between an economic and financial view of the world, where the dollar is king, and us, who wonder whether the machines can actually get us there in the direction that we are going.

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One of the transitions I am going to talk about tonight is the renewables transition. On your left is a graphical representation of the types of energy technologies that, if we just sit here, like we normally do in Australia, doing nothing much and just watching the Olympics and so on, we would be having brown coal, black coal, a bit of gas and all those sorts of things. The world that I am shifting Australia into through my numbers is that bigger one there where we try to get to a 20 per cent representation of our electricity production, in this case, from wind, solar thermal, solar photovoltaics and biomass. You will see there that we still have a bit of combined cycle gas turbines, the hydro we have already and also we transition out of the old coals into advanced coals.

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As you keep coming to this lecture series, you will hear leading edge researchers talking about these issues, but I'll just give some facts. You know what a wind turbine is. The simple facts are: it only really produces, at max, up to about 30 per cent of the 8,700 hours or something each year; it lasts around 25 years; and it is one of the most efficient generators there is in that, within three to six months of it being up there and turning, it has actually repaid all of the energy that has been embodied in the production chains to make it. That has been reflected today in that it is also very cost competitive with a range of our current electricity generation systems.

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Solar photovotaics I do not have to tell you much about. There is a much lower load factor, obviously, and an energy payback time of two to three years. I am sure that, when Martin Green talks, he will tell you that things in his laboratory are already on a year and they will be getting less by about 2020.

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Solar base load or solar thermal, the big dish near the rowing club on Sullivan's Creek that the ANU has been working on for about 20 years – that type of technology has had huge deployment already in places like Arizona and Nevada for the last 20 years. It works an absolute treat, with a load factor of 36 per cent – I will call it 'solar base load'. Its big advantage is that, if you put simple storage systems on it, it is the equivalent of base load generation.

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Finally, biomass electricity, which is where we sustainably grow wood and other stuff like that and not only put it through simple thermal boilers but also gasify it and drive gas turbines. They are the four that you will hear a lot more about.

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I am going to introduce you to the base case transition scenario. I will not talk about it in too much depth except to say that we assess these things as we are going through these transitions and try to run the numbers with a whole series of indicators that tell us a story – GDP growth rate muddling along at two per cent to three per cent for the next 30 to 40 years; CO2 emissions continuing to go up; and a thing called 'physical affluence', which is the amount of energy that we churn through our households every year on a per capita basis that keeps going up. You will see some discontinuity there – big gaps in our GDP, when things plummet down to the earth, that the Treasurer would not be at all happy with. They are due to issues like our domestic oil running out in about 2025 and our gas getting very thin on the ground – or under the ground, if you like – by 2040 to 2045 because we have exported most of it. I guess, with that stock issue of the fuel supplying the function behind our economy, they are the things that separate the science-based models from the traditional economic ones.

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I will not make you look at lines all night but, if we add all those things up, it gives us some big lumps of stuff with which we can evaluate things. By about 2050, this base case – this blind, deaf and dumb Australia going ahead – will make about 74,000 billion-constant dollars and 29 billion tonnes of carbon dioxide emissions, and our infrastructure stocks will be at twice today's level. If Kevin Rudd and his merry persons keep putting $22 billion or something into the National Future Fund that pays my pension – a great idea – we will have about $1,000 billion in there.

Finally, this physical affluence figure in gigajoules per person does not mean much to you, I guess, sitting in the audience. But, if you reinterpreted that in medium sized cars, MSCs, over the next 45 years, under the base case, each person would have the physical consumption equivalent of about 60 of those medium size Corolla-type cars. That is a look, if you like, at where we are going under the blind, deaf and dumb scenario.

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When we put that big scenario with a rapid transition to renewables in place by 2035 or 2040, we get a whole range of pretty good outcomes. The GDP of both scenarios is just about exactly the same, so Mr Swann will not be upset by this at all. That one change to our physical economy, changing the nature of our energy generation or our electricity generation, has shaved 10 billion tonnes off the 29 billion, and that was the challenge we faced. You will say, 'Well, that's not going to solve our greenhouse issue' – and it is not. I will perhaps talk about a few other issues, but I am keeping it relatively simple and making the case for one big transformational change tonight rather than talking about the 20 or 30 we have to do.

The central figure is there: the capital stocks. Australia is a lot richer in its infrastructure stocks because we are taking a lot of the consumption splurge and putting it into national infrastructure, which basically is our new renewable energy infrastructure; you could see that as part of our 'common wealth', if you like. The Future Fund is about 10 times what we had under the base case, but our physical affluence – that churn of energy through our per capita consumption each year – has had to decrease slightly because of, I guess, the big change we have had to new renewable energy infrastructure as well as a number of other issues about the wheels within wheels that drive the economy.

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If I put those lines up again, you will see that again, if you are Mr Swann – up on your top left – it will be a pretty bumpy ride for the first human generation or so of making this scenario. The pressure of making such a massive change through our economy and replacing effectively very economically efficient generation infrastructure with stuff that is a lot more diffuse and collects sun and wind and so on certainly puts our GDP growth rates down. But, as we get into the second half of the transition – our children's children, if you like – Australia starts to encounter some potential problems caused by running out of gas and so on, and you will see that the scenario jumps up and is almost too buoyant. This is reflected in the other top graph, which is the trace of CO2 emissions. There, for the first human generation, just one change alone starts to stabilise and starts almost to decrease our emissions trace. But then the buoyancy of the economy will take off and require about four or five other large changes – which I am not going to go into a lot of detail about tonight – before we actually get that flattening and then starting to decrease.

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Just to reiterate, these are the big stocks, if you like – the simple figures: a GDP outcome that is almost equal to that under the blind, deaf and dumb scenario; a major change to the total amount of greenhouse emissions that we put out; and capital stocks that have increased by about a quarter so that, in national wealth terms, we are a more wealthy nation. Our Future Fund, which we have parked off to the side somehow, waiting for a rainy day when things get tough, but not re-stimulating the economic wheels-within-wheels, and consumption is many times the base case. But there has had to be a slight adjustment in the energy churn that goes through our individual life styles.

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There are some key dynamics here. As science-based modelling looks as these things, there is a continual battle between what I would call the over-stimulation of the industrial area in Australia, as it strives to make this massive transformation, and a tendency for our own personal consumption to what we call 'rebound'. That's one of the management issues that we have to deal with, both physically and financially. I have made the point that, once you get the system in place, it is very buoyant. Basically, it has very few supply chains. As the wind blows and the sun shines, the place just chugs on pretty well.

It's a huge investment and you might see a huge amount of redundancy. For days, weeks and months of when wind does not blow or sun doesn't shine, there has to be something else to cover for that. You would not term that very economically efficient, but that is the environmental or physical effectiveness, if you like, of this world that we may have to go towards. The reason that these different sorts of energy technologies are seen to be more costly is merely that the GDP activity is reallocated or partly reallocated to industry and the utilities sectors and out of our personal shopping. I have made the point that our national wealth – in 'common wealth' terms – increases, and you have taken on board already that doing the electricity system alone makes a major change to the greenhouse issue but does not absolutely solve it.

How do renewables compare to 'best conventional' wisdom? This is the question, I guess, that starts us off in this lecture series. That is one line and, if you wanted to read the Green Peace document 'Energy Revolution', you would get that same story. In terms of what you read in the national and daily media, I guess the key question is: how does this compare to what we would call 'best conventional wisdom'?

There are a number of issues, just before I get into that. One is that nuclear does work fine, but the main problem with it is that its project implementation time effectively can slow down the economy. Putting carbon capture and storage on our traditional brown and black coal generators also slows down the economy because there is a parasitic loading in there that we modellers call a 'negative feedback loop'. To get over that, you have to put in fossil generators that are of only the very highest efficiency. For us, that is generally combined cycle gas turbines and also carbonate fuel cells. When you start to put in these things, extra pressure is added on to the domestic gas reserves – and, to fix that up, a number of other things are needed.

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The sort of alternative future that we could undertake is one there where we are going to advance coal, to fuel cells, to combined cycle gas turbines and also to nuclear, each again making the transition through to 20 per cent of our generation requirement.

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Again some quite surprising outcomes, you might think: a similar GDP outcome, so the Treasurer, industry and the suits who hang around the centres of power are going to be equally happy and advantaged by that outcome. It gives about the same type of CO2 reductions; a minor change in parameters and things would make that absolutely the same. Capital or national infrastructure stock, if you like – the national 'common wealth' – with how the place is set up and works is lower, the Future Fund is lower, but the physical affluence is slightly higher. This is a reflection of the race between energy densities. Human-kind has advanced so quickly and so well over the last 250 years because of just the density of energy in stuff like coal, oil and gas. It is hard to match that with the diffuse sources that solar types collect. So there is a bit of a mixed outcome there: some the same, some better and some worse.

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The key issue for me and something that you should think of as we go through this lecture series is the CO2 accounting – that is putting carbon capture and storage on all of those fossil generators, although obviously not on the nuclear. First of all, those more efficient generators and nuclear avoid three billion tonnes of emissions that we had in the base case, and we have actually captured and stored about 5.6 – say 6 billion tonnes – of carbon dioxide. You may want to ask whether we have storage capacity for Australia in that. We do have – and science tells us that it is many hundreds of billions of tonnes. In fact, I think I'm right in saying that the saline waters in the Great Artesian Basin could adequately store that 5.6 billion tonnes over this 45-year period in the future that I am talking about.

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Nuclear waste: the nukes that we have in there, I think about 25,000 or 26,000 megawatt units, end up giving us back about 72,000 tonnes of medium-level radio active waste. This is fairly reasonable stuff to deal with. You have to sit it under water for a good length of time to let it cool down. However, I would remind you that, at the moment, we have about 8,000 tonnes of low- and medium-level what I call radioactive cotton wool. We have the hugest problem in trying to work out what to do with it. For me, waste storage and long-term risk – given that both scenarios end up with some good, some bad and some equal – is one of the key issues.

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I quote here one of the very big brains in energy integration around the world, a very famous professor and author of books from Manitoba University called Vaclav Smil. I will not read all of this out; you can do that quickly yourself. He makes the point that, even attempting to capture about a 10th of today's yearly emissions, which is about three billion tonnes a year, would have to capture, compress and force underground the same volume of liquid in the end that we pull out with the global oil industry every year. He makes the very strong point that it has taken about a hundred years of really big tough blokes in hard hats or whatever to get all of those pipes and stuff in place. His opinion – I regard his opinion quite highly – is that the technical challenge of this in a global sense, while we might be able to manage that in Australia, could not be accomplished within a single generation.

Which is best? I think I will leave that to be talked about in discussion. I am making a strong case for the renewables transition. But, in fairness and honesty, a similar set of numbers are there.

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How robust are renewables, you will want to know. I guess, as all science and these sort of analyses do – we do a whole lot of what we call 'sensitivity analysis', where we double and triple capital costs and add 10 per cent to and subtract 10 per cent from those key load factors. We decide not to suck consumption growth out of the economy and to just let better technology do its bit. I guess, the general point is that the transition is pretty robust. For example, with a doubling of those capital costs – which are already fairly high conservative figures that I have put in – to reflect the whole world going crazy or whatever, we still get through to a pretty competent economy although it is a bit less robust or less buoyant than the one I have emoted to you; nevertheless, it is still a very competent economy. If we triple the capital cost, which is way outside of the limit that you would expect, that really does slow things down a fair bit. You would say, 'Well, if they're going to be triple your figures, we're not going to get there.' However, I guess the key thing that I continue to say or promote is that, as opposed to quite a few technologies that we do not have in place, with the best conventional transition at the moment, all of these renewables are in place and are working on a grand scale in many parts of the world, some of them in Australia.

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You do not have to believe me alone. All these figures are mine. I have been worrying over them for about 10 years, trying to get them better and better while a poor client has been waiting for the final figures. But a number of incredibly important, I think, supporting studies are coming out. This is a real humdinger. I am not sure whether it is out yet, but it is a World Wide Fund for Nature study that was commissioned by a group called Climate Risk. Their point – with a not completely different but separate approach to the one that I have used – is that, if we are going to make this transition to a low carbon economy, we have to have a massive ramp-up and all these things must be done in parallel. If we do it in what is traditionally seen as the right economic way to do it, where we do the lowest cost first, we are never going to get there. It is always going to be too little too late, given the size of the thing we have to deal with. The big point that they make about this is that, under this massive parallel roll-out, one of the technologies can fail or not deliver in a big way while the others are in place with sufficient scale to rapidly expand and cover that.

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Their work shows that an expansion rate of 20 per cent for the year is physically feasible; it is a bit institutionally tight. There is enough stuff to do this around the place. The most important things are the soft skills and, of course, the lawyers and the accounts, God bless them, have to put in place all the budgets and obviously the contracts that have to be signed.

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Another important study was released from CSIRO I think only two or so months ago. It always comes about: what is this going to do to jobs in the fossil fuel industry or whatever industries? This is an interesting study and (it boasts) of using the physical economy models that I am promoting tonight, but it also used the big economic policy models in Australia. It showed, with little doubt, that making this sort of transition and doing a lot of other things besides can see a massive growth in jobs over the next two decades.

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As opposed to the story I have been giving you on the renewables, there are a lot of reports. As Sue said at the start of the lecture, there is a big one out almost every couple of weeks. For people like me who have to comment on them, sometimes speed reading 600 pages at a time gets to be quite a challenge. Without lambasting any of what are all excellent studies, given their own background, none of those in the top tiers of policy, if I could put it politely like that, ever try to make this massive change to a renewable system; it is always a little bit of renewables here, a little bit of that there and, 'Oh, let's get back to coal.'

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It is what I call the 'Don Bradman factor': 'If it wasn't working when the Don was here and making all those runs, then we don't want this in a good little economy like Australia.' Like: 'The Don had never seen wind turbines; they might have put him off his stroke when he was in the middle of making a century or so.' I am making light of it a bit, but there is an innate conservatism in Australia that shrinks away from the big challenges that we have to take on.

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There is quite a range of issues, as I said, on which people could attack this renewables transition and there is the question of storage, buffering and balancing. That is, can we keep our electricity network viable as well as keep my computer going while doing this sort of thing? Again, generally, that is solved; it has to be deployed. I have a figure there. I do not have shares in Lloyd Energy, but the way. That is just a big graphite energy storage thing that is going to be attached to the Ergon Energy solar base load plant at Cloncurry. The big dish down by the rowing shed uses breaking of chemical bonds; others use molten salt and so on. A lot of these issues have been solved or are in the process of being solved.

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I think I might jump across that one, as it takes me off into another area.

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Pragmatically, when we are trying to do these things, we design them so that we get economic growth rates that are similar to those of the intergenerational report, Treasury and ABARE – a whole range of expectations that normal policy wallahs trot out. That is what we try to do. However, as I am battling through the complexity of some of these things, it does not go unnoticed that, if we take average growth rates of between nought and one per cent, as opposed to the two per cent to three per cent, which I have trotted out in the established and set-in-concrete scenarios, if you like, the transitions are a lot simpler, less complex and less agro in the thermodynamics that are attached to them.

I love that graphic. It has been pinched from Pryor in the Canberra Times. It shows Mr Costello and Mr McFarlane, the ex-Governor of the Reserve Bank – it would now be Mr Swann and Mr Stevens, of course. Energy analysts and the people trying to contain inflation have much the same aim: we want to ramp things back, as does the Governor of the Reserve Bank. Those in national leadership want to get it going as fast as possible. The deeper point I want to make here is that we often read paper columns about weightless economies, virtual economies, virtual growth and issues like that. Nowhere in the decade or so that my colleagues and I have been working on it have we found a space in the physical economy where we can find growth that is virtual that is growth without increasing physical impacts across the whole system.

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That brings me to: should you believe me or should you believe them? I think we probably need both approaches to try to get to some closure on these quite tough issues. Obviously, economic models do economic things best; we do the thermodynamic things best. You need both.

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As you listen to the following lectures, a key question to think about is the whole question of energy use. This is a graph from a colleague of mine, Franzi Poldy, at CSIRO. It just notes the very close relationship there has been over the last hundred years between real GDP and the amount of energy we churn through all our machines in our households. It is getting a bit deep and analytical here. The Australian economy seems to be one in which growth and energy use drives growth in the generation of dollars.

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If you take it a bit deeper, the face there is a bloke called Robert Ayres. Again, he is one of the real brains worldwide in this sort of work. He is a grumpy old bugger – almost as grumpy as me, really. The fascinating thing that he does, and has done for three or four of the major economies in the world, is put together their economic expansion over the last hundred years. He has been able to explain it all virtually by changes in the efficiency of work in the economy the physical –notion of work; not the petrol that goes into the motor but the action that happens at the back wheels. It is that sort of work.

This is a fascinating thing. As we see America on the decline, the red graph there is the rapid rise in the efficiency of electric power generation and distribution in the US. Almost an economic historian would point to the fact that, when it was in that rapid rise upwards, America was great and powerful and in its ascendancy. You have seen now for the last 30 or 40 years that it has been flat, although the heat ones have been going up. This reminds us that underneath each dollar there is a whole range of, obviously, economic transitions but, more importantly, physical and energy transactions, which are actually the things that drive the economy and are pretty important.

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The last issue – I guess it is not related to this exact transition that I'm talking about – is that I just want to make the point again that, if we do not make these massive changes to our economy, in CO2 alone we will be pumping out about 29 billion tonnes over that blind, deaf and dumb scenario period out to 2050. We will also be exporting to the rest of the world about 53 billion tonnes of CO2, which, according to the estimates out of my model, is a total of around 80 billion tonnes. So, while we read every day in the paper – particularly in that flat earth journal, the Australian – that we only do about one per cent of world emissions and so why should we try, that 82 billion tonnes will have quite an effect on the atmosphere. I just want to arraign it and compare it, if you like, to the changes in greenhouse emissions that have come from global land use change since 1850, when we really got into clearing the earth, which is about 148 billion tonnes or – this is the figure I really like – the 114 billion tonnes in the 6,000 years up to 1850, before that, in which human-kind evolved. I am just trying to put to you: how aggressively should we feel about these issues? Are we up there in the gold medal class?

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I am coming to the end, Mr Chairman – the time Nazi down there. We will soon be into question, discussion, challenges and so on. I guess I just want to make these points again. I have talked about a top-down approach to changing just one bit of our energy infrastructure and how that can give us reasonable numbers coming out. However, you and me – all of us – have to make a lot of changes by the year 2050. It might be worth just talking about the set of blue dots down at the very bottom. That's little Tassie. The reason they are so low is that they are a lot poorer than us. If you ever go to Tasmania, in some places you feel it – in the shops, as you walk through looking for your Big Ben pie and so on. But there are also two other key factors. One, of course, is that a lot of their electricity is hydro-electricity and the other is that their pastoral agriculture is a lot more efficient; a lot less methane and so on is involved in it. So Tassie is well on the way, even halfway, to making the transition, if it doesn't grow too much and get too buoyant. Compare and contrast it with even some of those suburbs up on the very top; they are ones in our very own Canberra.

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I have made this point a couple of times: the numbers that we get from this very aggressive, huge change, this total revolution, to the way in which we generate our electricity in Australia can give us pretty good numbers for everyone. There are some people, like ourselves, that have to take some pain, but there are other issues in a national sense which we balance with what we may have to give up ourselves. One of the other areas, which is a key area, I am working on is transport fuels from biomass. That gives us another five- to six-billion tonne advantage when we really get into it. After that, there are all the things that you read about – better houses, better cars and so on.

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Were I from the Minerals Council, I would be telling you why we should not move off coal, uranium, natural gas and so on, but I am not from the Minerals Council. Instead of having Simpson and his Donkey in every school, as at one stage it looked as though we would have, something like this made into a poster should be on every classroom wall in every school in Australia.

We are told that we have great mineral wealth, and that is true. But, when we look around and just think about this overwhelming array of renewable energy sources that are just there – and we are not even talking about the very best. If you just look at wind, the very dense bit along the coast is where you would put the first wind turbine generators. Just going west from Canberra and north from where I now live into Australia's wheat-sheep zone there is a huge wind resource. It is not as big as the west coast of Tasmania, but it is very cheap land and very easy to work with. Wind turbines do not upset sheep, kangaroos, the growing of wheat and so on. If you start to put my 20 per cent of each technology across each of those maps, you will find that it is not very far from the core transmission lines. It is not very far from where we live that we have this huge – I won't call it a free resource – enduring resource. We have to spend a lot of money because it is so diffuse to collect and concentrate it. But, for me, that is a thoughtful set of maps that should be on every fridge door, really.

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When I worked for a public science organisation and made grand statements like this, the question that most annoying managers used to ask me was, 'Are you absolutely sure, Barney?' I guess science is never absolutely sure. All I can do is say that this engineering, science and physics base that we use, where we underpin the functioning of the economy with how things actually work – these things are real. They do not change. You can measure them. A joule in 2050 is just the same as a joule today. Who knows what a dollar will do in 2050? All the assumptions that I have put into the modelling are very, very conservative. Again, I do that to make sure that I am not open to too many challenges. Originally, we started off that base case, which I introduced you to, by making sure that we had strong agreement with all the major economic projections in the land. So, again, we are not singing from different hymn sheets.

I will admit that there is somewhat of a tension between the huge detail that I should be accessing all the time about every technology and everything that is just about ready to come off the shelf in renewable factories and things, but somehow you have to balance that huge detail with getting things going at a national level. I guess I would promote the case that, for every number that we use in this work, there is huge international science back-up as well as back-up from our own scientific system.

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I think I have said enough. Each month from now on, you are going to get the lowdown on an energy technology. To continue with the Don Bradman metaphor, this is just the opening innings. These things fit together and they have given us a competent economy. Option one that I leave with you is to stay with how we do things now and to put your full trust in unproven end-of-pipe solutions to capture and store our carbon. Option two is really to embrace the next industrial revolution and also to try mightily to recapture our industrial base.

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In closing, all the work that I talk about has a huge range of previous intellectual property, funding and a number of good university homes that look after me and keep me well stimulated. So I think we will now open for questions and comments.

Discussion

Question (Brian Kilgallen of the ACT Greens): How do we get the hip-pocket nerve to vote for this stuff in the Territory election in seven weeks time?

Barney Foran: That's a tough one, isn't it? I think 'in seven weeks' is going to be a real challenge. This is a medium-term challenge. I think one of the key things for me is just seeing what is happening in some municipalities in places like the States and in Europe, where local councils are starting to – I think the word is – 'amortise'; that is to put up the funds to make the transition through to big renewables on roofs, if you like. Instead of people having to take the money for that out of their own wallet, if they are poorer, they can put it into the rating base and can pay it off that way. It stays with the house. Whether you sell the house or not, that is a part of the town's or shire's infrastructure. They are doing that, of course, to try to capture the jobs and skills and green collar jobs, as we call them today, that are going to underpin their children's children in that area. I think something of that nature, looking for financial instruments, if you like – that's a hell of a jargon word – looking for ways in which we can organise ourselves to just get into it and almost bypass impediments that still appear to be facing us as a national level.

Question (David Denham): I'm a bit concerned that you still have this GDP up there as central to your arguments. It seems to me that we have to get over this thing that growth is what we are after, and GDP is pretty terrible. If you extract oil, a resource that is very valuable, the GDP goes up. If I crash my car on the way home tonight, the GDP goes up more than if I do not crash it. With this growth, you have to first of all restrict the population – and I do not know what the population was in your modelling. But we have to get around this culture of growth because we are a finite planet and we cannot keep on growing. Somehow or other, we have to get rid of GDP or get economists to get rid of GDP and think on a different plane, if we are going to survive on a finite earth. I would like your comments on that.

Barney Foran: Yes, I think I would agree. I guess some of us perhaps have been railing for 20 years about the use of GDP as the only measure of progress in the nation and in the world. I guess the reason I still use it is that we are still trying to influence the worthy, the powerful and the people who do not think past that figure. One of the metaphors by I think a chap called Malcolm Slesser, who started off the modelling methodology that I use, is that making the change is like a good jujitsu player: that you use the weight of the economy to throw them. I do not disagree with you, but I am still trying to battle some of these big ideas into a conservative mindset in Australia and almost say, 'Well, you can have what you want in economic productivity terms, but this new economy has a vastly different structure and composition than the one you're dealing with now.' So I do not disagree, but we are not influencing the dominant decision makers yet, and that's a challenge for us all.

Chair (Mike Dopita): You might add to that: how do you get over the industrial lobbies?

Barney Foran: That's a tough one for me. I wonder whether the Greenpeace person I was talking to earlier, who has been trying to do exactly this, is still in the audience.

Unidentified: I'm up here. I do not know the answer to that either.

Barney Foran: We were talking about just how difficult it is. Perhaps I can put words in your mouth and say that you have been presenting this stuff to major – would you like to carry on?

Unidentified: I was saying that were just taking this report that we had written very much along the same lines as you have been talking about tonight, which is about how we transition the economy across to renewables. But we don't actually have a (inaudible) and again we framed it without any losses in growth in GDP. I think people understand and acknowledge the underpinnings of the report and they acknowledge that the assumptions are very conservative, like in your work. But they look at it in the (inaudible) are you telling us we can actually reduce our emissions by this percentage?' We say, 'Yes, by 2050.' They say, 'No, we don't really believe it.' It is hard.

Barney Foran: It's tough, yes.

Unidentified: It's a different mindset.

Question (Jenny Goldie): Thank you for a fairly optimistic view of how we can transition the economy. I know that you were talking about the electricity grid and so on, but it seems to me that the major problem we have confronting us in the next few years is transport fuel. You alluded a little bit, just at the end of your talk, to transport fuel from renewables. We are probably past peak oil, but we are facing fuel prices of $8 a litre in three years – that is what some people were saying not long ago – which is likely to send the whole economy into a tail spin. How quickly can we move to transport fuels based on renewables?

Barney Foran: I guess I am right in the middle of this at the moment, running the numbers. Natural gas is a nice bridge, but it does not give us many greenhouse advantages. The thing that has always been my passion is growing massive amounts of wood on Australia's farmed lands, on the areas that are already cleared, and converting that with what we call second-generation technology to either biomethanol, bioethanol or a diesel fuel substitute called diethyl ether. These are well-established industrial pathways. We need to start planting 'woodscapes', I call them, at the rate of 1 million hectares per year, undoing the good clearing job we have been doing since about 1960. We can regain reasonable fuel security by doing that.

Chair (Mike Dopita): It might even improve the climate as well.

Barney Foran: It has to take place almost at the same time as we are doing the renewable electricity transition. It does hang together, and we can keep a reasonable economy going. You might say, 'Well, when are we going to start?' I think we might still be asking those questions in five years' time. My job is to design well-developed pathways to try to influence the national mindset when it decides it might change – in crisis, probably.

Question (Pete Gorton from the International Solar Energy Society): Do you have any comment on energy efficiency as the great untapped secret weapon to work with renewable energy to allow us to achieve the vision in 2050 and beyond?

Barney Foran: Yes, I am somewhat ambivalent about it. That is the reason I put in that bit about Australia's productivity being driven by energy use. The big theoretical issue which is not so in some service-driven economies – although service-driven economies are not really service-driven economies – is that there is a certain amount of energy efficiency that is an obvious thing to do and will work. But starting to really cut our energy use down – again, that earlier point – underpins people's wish for growth in the way the Australian economy is structured at the moment. It is a huge theoretical area which there is very little acknowledgment of. It is a bit like Goldilocks: not too hot, not too cold. Still, I guess, we are not seeing energy prices that will start to force those efficiencies; affluence growth just outspins it all, if you like.

Question (Margaret Causey): I am interested in your notions of the woodscapes and how 20 per cent of fuels can come from biofuels from the cleared areas. It seems to me that entropy comes into this because we are now considering that to grow things you need water and with global warming water is going to reduce. Those cleared areas particularly are in the low-rainfall areas of Australia and, to produce sufficient biofuels, you have to have water. There is a trade-off. You do not get anything for nothing. I would really like to be convinced. You are taking 20 per cent of your renewables from something which is sort of not quite renewable without a trade-off.

Barney Foran: You are right. We do the trade-off. We run the water models underneath our planting regimes, and there are effects in many areas. The outcome of that would be that we obviously would not be planting large areas of it in things like the key catchments in the Murray Darling Basin, for example. But there are a lot of other areas that are still photosynthetically competent, even given a decreasing rainfall, and that can still grow the amount of stuff that we need. What we are doing is replacing annual and perennial grasses and crops with a longer term perennial crop. We do run all of those issues in parallel and find that we still get a competent system out of it. But it is a fair point that you make.

Question ( Bep Canadel from CSIRO): Thanks for the great talk. I want to try to put in context your very aggressive 80 per cent renewable energy scenario with what is trying to be done globally – and also with what Australia is trying to do – with emission reduction targets by 2050, which would take us to no more than two to three degrees centigrade globally. We are pursuing about a 60 per cent cut in current emissions. What you show is that a very strong 80 per cent renewable results in about a 40 per cent or a little less cap on emissions. I am just trying to get a sense of how far you think that we are, even being very aggressive, to be able to actually stay with this national quarter that would take us under two degrees – and that is not to say the rest of the world but at least for Australia.

Barney Foran: Yes, thanks. That is a good comment. To keep things relatively simple tonight, I have just stayed with the electricity scenario. To get down to the levels you talk about is extremely difficult. But we are on 60 per cent to 65 per cent now, with about three or four other parallel strategies in unison, one of which is the biotransport fuels as well as changes to the efficiency and changes to the energy mix within industry and so on. At the moment I can get us down to 65 per cent, but I am really struggling past that. Part of it is, I think, as you would know full well, because of the philosophical wedges; each technology has a wedge. That is a good way of representing things but, as you introduce them into a dynamic and growing or functioning economy, to keep everything functioning the way a policymaker might like it is not possible when we get down to – and I really struggle to get down to – 80 per cent and 90 per cent below current levels and still keep something that people would represent as an Australian lifestyle. You may say that the lifestyle has to change. I guess that is a later essay I will have to write as well, but it is very difficult to get past 65 per cent at the moment.

Question (Alex …): I am Alex and I am here representing myself. With that point about fuels and $8 a litre, the International Energy Agency and our own ABARE figures indicate that in 2016 a barrel of fuel will be about $50 or $60 a barrel. So you do not actually need to sell your six-cylinder car at this point, as far as main world sort of leading analysts for fuel prices say into the future. That really puts a hole in anyone trying to transition who is running a major corporation. The major problem that we have isn't (inaudible) you do such fabulous work and we all understand what's going on (inaudible) it's the industrial (inaudible) the global that have no borders, the companies. We look at trying to transition Australia and they are not concerned with Australia as a nation; it's just a location on their corporate map. It becomes a real issue. I think one of the biggest focuses that people need is: how do we address the industrial leaders that are controlling our planet?

Barney Foran: Yes, I would agree. I would not believe that $50 or $60 a barrel of oil, though.

Question (continued): That's the forecast.

Barney Foran: I know that it is forecast but, if you read Fatih Birol, the head of the International Energy Agency in Paris, you will know that he has rapidly changed his tune in the last three months. Again, I will always remember being at a peak oil presentation to a senate subcommittee and a great ABARE person, who shall remain nameless, had a wonderful line. He said, 'Minister, we used to have a saying in agricultural economics that, if the price of eggs goes up, even the roosters will start laying.' That is the fairly deep philosophy underpinning of much of our national economic projections that underpin policy.

Question: My question is also relates to the idea of growing fuel for transport by growing a lot (inaudble) by converting cleared land which, as you said, is either pasture or crop lands and turning it into woodlands that you are going to convert into a biofuel. It seems to me that we have forgotten the issue of how to feed people in Australia as well. I wonder if you could comment on whether you are factoring in population growth and food consumption, particularly in the world, which is increasingly concerned about food security; or whether, if we are going to pursue biofuels as one of our options for transport, we instead should be looking at waste generation (inaudible) second generation – that is, after you have used the product as food, you use the waste product that is left over, such as the waste from sugarcane fields and a few others. We saw what happened in Mexico with the price of tortillas, after America moved on trying to convert coal into ethanol. I thought that was something you would be aware of.

Barney Foran: Yes, it is a good point. In the planting rules that we use to do that, we only ever use, in each farming region of Australia that we step through, 10 per cent of crop land, 10 per cent of planted pasture land and 10 per cent of what we call rough land. We have a huge amount of what I would call 'rough land' in Australia, so we maintain normal dietary requirements for a population that grows to 25 million or 26 million in this time. That is not as high as we are growing now but, again, I stay in – not sympathy at all – balance with what the nation expects. So, yes, and we maintain our agricultural exports. You make a good point about using food to make fuel, but the point is that, even with the gas from sugarcane and using our municipal waste to make fuel, there is still not enough bulk and volume to do anything more than power our taxis, if you like. Do we go for a massive investment in mass transit, mainly electrically driven, or do we still keep our cars? I guess each one of these is worth a lecture in its own right. I did not mention regarding fuel – certainly for the city commuter it is just about there now – that having a battery powered car at home and driving only 50 kilometres a day, from the Colorado study I have seen in depth, can save emissions overall in almost totally avoiding petroleum within the city and using the system that is there, running anyway, to charge the cars at night. As Jenny says, I am a bit of a technological optimist, but I am trying to find the sweet spot that not only gets us through to where we have to be in carbon and environmental terms but also keeps those addicted to other measures, if you like, still feeling that they might be making a transition to something that they vaguely can understand.

Chair (Mike Dopita): I hate to cut off this wonderfully productive discussion and go home in my Prius to my energy efficient house. We have seen really now the focus of all of the policy issues that face a serious discussion about alternative energies and all the issues relating to vested interests who will fight to the last gram of CO2 to keep the petrol habit going. I think Barney has done a wonderful job of showing us that waiting out there for us is an economy that could work – and a vision to send to those politicians who will be able to bring us to that end.